DLF doubles land bank; silent on valuations

DLF has doubled its land bank in the last six months and its IPO has been on hold.

The company has disclosed a land bank of 10,255 acres in the draft red herring prospectus filed with the SEBI on Wednesday, which is more than double the 4,265 acres that it held as per the original offer document filed in May 2006.

Interestingly, unlike the last time, the current offer document is silent on the value of the land bank. In the document filed in May, the company had published valuations made by Cushman & Wakefield (Rs 77,000-85,000 crore) and Jones Lang LaSalle (Rs 85,000 crore).

However, not all of the land bank that it holds now has been fully paid for; DLF still owes Rs 5,537 crore to different parties. The developable area has now been increased to 574 million square feet as against 102 million sq ft declared in the original offer document filed in May 2006. About 29 million sq ft developable area is held through joint ventures with others.

Lower issue size

The size of the issue has been reduced to 17.5 crore shares from 20.2 crore shares of Rs 2 each earlier. An offer for sale by the promoter and promoter group has now been withdrawn though that alone is not the reason for the smaller issue size.

Post-issue, the promoter group would hold 87.49 per cent of the share capital. The existing paid up capital increased in the interim period due to conversion of debentures and consequent bonus issue as part of the recent settlement with debenture-holders. Further, there is no mention of any green shoe option now.

More on SEZs

On the business side also there are a few notable changes.

The latest document throws more clarity on the company's plans for development of special economic zones. Gurgaon, Chennai, Pune and Amritsar are some of the locations mentioned for development of SEZs. Joint venture with US-based hospitality company Hilton, expansion of operations in multiplex cinemas and a possible wind power business are some of the new additions made.

On the financial side, DLF's business income was Rs 1,971 crore for the eight months ended November 2006 as against Rs 1,154 crore for fiscal 2006.

The company's secured loans also doubled over the same period mentioned above.

(This article was published in the Business Line print edition dated January 5, 2007)

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